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Welsh health boards' deficit reaches £163m

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Media captionDr David Bailey, chairman of the BMA's Welsh council, said having to hire more expensive temporary staff has had an impact

Four Welsh health boards will have overspent by a combined total of almost £163m at the end of this financial year, analysis by BBC Wales reveals.

It will be the biggest single-year deficit ever recorded in the Welsh NHS, despite record investment, according to ministers.

One health board – Hywel Dda in west Wales – is responsible for more than 40% of the total overspend.

It has a forecast deficit of £69.6m by the beginning of April.

That is 40% higher than its overspend of just under £50m last year.

The health board spends more proportionately than any other in Wales on hiring temporary doctors and nurses, as a result of severe recruitment difficulties.

In its latest financial report, Hywel Dda said although this year had been "the best so far" in terms of savings, they had largely been wiped out by "local cost pressures".

The latest figures also suggest Betsi Cadwaldr University Health Board in north Wales will record a higher overspend than last year – up from £30m to £36m.

It has been in "special measures" and under the highest level of scrutiny from the Welsh Government for two and a half years.

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Media captionWelsh Conservative leader Andrew RT Davies challenged the Labour administration's management of NHS finances

External accountants concluded its deteriorating financial position was "fundamentally due" to it not fully embracing the "transformation agenda" in recent years.

The Welsh Government said it had been open about concerns about both organisations' failure to keep within their spending totals.

While both Abertawe Bro Morgannwg and Cardiff and Vale health boards have seen some improvement in their financial positions, both predict significant overspends for the second year running – £30m and £26.9m respectively.

However, the three other Welsh health boards have succeeded at living within their means.

Image caption Hywel Dda health board is responsible for running four general hospitals, including Withybush in Haverfordwest

Cwm Taf, Aneurin Bevan and Powys predict they will balance their books at the end of the financial year.

The final figures will be published in July, but the latest forecasts indicate a combined total deficit of just over £360m will have been racked-up by Welsh health boards over the latest three-year period.

That is more than 40% higher than the £253m overspend recorded between 2014-15 and 2016-17.

In their latest financial reports – several health boards also indicated they might face financial penalties for not achieving Welsh Government targets for reducing waiting times, or could need extra financial help to deliver those reductions.

Last year, Health Secretary Vaughan Gething warned overspending health boards would not be "bailed-out" by the Welsh Government and said he would not approve financial plans "that do not deliver improvements".

In July, Mr Gething, announced that accountants from Deloitte LLP had undertaken financial governance reviews of Hywel Dda, Cardifff and Vale and Abertawe Bro Morgannwg health boards.

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Later, it was revealed an independent financial review of Wales' biggest health board – Betsi Cadwaldr – had also been ordered by the Welsh Government.

A think tank has already warned the Welsh NHS was facing "the most financially challenging period in its history".

Experts from the Health Foundation in 2016 predicted Wales' health service could face a £700m black hole in its finances in just three years – equivalent to almost 10% of its annual budget.

But the analysis said the gap could be plugged if the NHS budget rose by 0.7% a year, if pay rises were limited and the NHS could find efficiency savings of about 1.5% a year.

Dr David Bailey, chairman of the BMA's Welsh council, said: "People are getting older, we've underinvested in hospital beds and it's quite clear there are particular recruitment issues in west and north Wales and health boards there are taking much more of a hit of getting temporary staff in, which cost more.

"The problem right across the NHS really is we don't have enough staff to deliver the care for an ageing population."

Nigel Edwards, chief executive of the Nuffield Trust health think-tank, said some of it was also down to "getting a grip and taking some tough decisions".

But he said there was a growing need given the age and state of health of the population and this was not reflected in the funding coming to Wales from Westminster.

"It's going to take some time to get this level of deficit down – my suspicion is it might take a significant amount of time," he said.

Image copyright Thinkstock

Conservative health spokeswoman Angela Burns AM said: "These soaring deficits show a health service in Wales which is teetering on the brink of financial abyss."

She said Welsh Government failures to initiate long-term planning measures for health boards and to "break the culture of waste and inefficiency" had all played their part "in the mess our NHS now finds itself in".

The Welsh Government has consistently maintained it has increased the NHS budget over and above what was recommended by the analysis.

A spokesman said: "Investment in our NHS is at a record high and Wales already spends considerably more on health and social care per head than in England.

"We are also investing an additional £550m over the next two years, including £100m to help transform the way health and social services are delivered."

It also released figures which showed numbers of consultants, qualified nurses, midwives, health visitors and ambulance staff were all at record highs.

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